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Wednesday, February 10, 2016

How to Sell a Video Game Part 2

Last post was all about the difference between variable and static pricing. As you'll recall, variable pricing is where the producer sells the same (or mostly the same) product to consumers at different prices. When talking about the videogame industry specifically, the big advantage from such a practice is being able to treat your customers as a group, instead of single customers. As long as the average sale price for each customer is high enough, the producer can make his profit, even if some people don't pay a cent.

What's the advantage to treating customers as a group instead of solo purchasers? While also utilizing the traditional advantages to variable pricing, it makes great use of social connections. Put simply, people like to play with their friends and to look good to other people. Take two friends that want to play a game together. Because they will only play together, there's no sense to treat them as two separate customers. Instead, it's better to treat them as one single customer.

Before the internet was a real thing for gaming, their options for a single purchase would mostly be console games, often using split-screen or having everyone on the same screen. One game, one purchase, but multiple people playing at the same time. As far as PC games go, outside of illegal activity or the rare two players on one monitor game, the only company I know of that had anything similar that I know of was Blizzard games and their spawning mechanic. Same idea applied though. Best example for a game targeted at a group instead of a single player was Rock Band/Guitar Hero. The game plus peripherals was expensive, but the combined experience was a lot of fun, and with the purchase split across the group the cost was very similar to other games.

Now with the internet, producers have more options to sell to customers and still target them as a group. Broadly speaking, I'd split the methods into three major groups (though possible overlap is always available): ads, cosmetics, and power. As well, all the old traditional possibilities are still available, but have the possibility of being smaller. A producer can sell a content expansion same as before, but only sell, say, $5 worth of content while getting the same percentage of profit as with the old $30 expansion. The old practices didn't disappear, but instead get smaller and more targeted.

Ads are simple to explain, just about everyone is familiar with them, because it's been the sales method of choice for public entertainment for decades. TV doesn't ask you to buy an episode before you watch it, opting to show ads along with the show to generate their revenue. Doing it with games works in a similar manner. The interesting bit with this method is there's no decision needed in order to "purchase" the content.

Seems small, but think of how much you care about a small decision to buy a $2 coffee. It's only $2 right? How hard can the decision be? Surprisingly, it is a difficult decision to make. All money is precious, even small amounts, and for most people a small amount of money still requires the thought any other purchase will take. The small amount of money actually ends up working against the producer, because rather than go through the decision making process on the worth of a game, it's often easier and better to skip the process entirely. It's only $2, it couldn't be worth that much to you to have you go through the decision making process. Hence, the big advantage to selling via ads, is you can skip that process entirely. Usually, it's made better by offering the option to skip ads entirely, for those that want to make that decision. Again, more options to sell to customers is better.

For me and my game, the plan is to sell via ads with the option to disable them for a price. I don't expect to make a game that's worth all that much, so I imagine the "worth" of the game would only be ~$1-$3. I could sell it straight for what it's worth, but given how unknown both me and the product are, I wouldn't expect to get many people past that decision threshold, even if they would deem my game worth the time if they had the chance. Why not sell cosmetics or power as well? Short answer: a singleplayer game like mine doesn't have enough social connection to make cosmetics valuable, and the game isn't setup right to take advantage of selling power while not annoying legitimate players.

If people really want to hear more analysis about selling cosmetics and power in games, feel free to let me know and I could do another post about them. Until then, I think this mostly answers the question of my choice of sales decision.

Final note: Please, if you found this interesting, make sure to like, share, and subscribe. They're really small actions, but it's surprising the effect they have on spreading projects around. Thank you, and hope you enjoyed reading this.